When Dendreon ($DNDN) was trying to bring its cancer vaccine Provenge to market, many doubted whether it could overcome the associated manufacturing and logistical hurdles. Ultimately Dendreon did better than some expected, but not as well as it hoped. And the same problems that made the cost of producing and shipping Provenge a burden for Dendreon still hang over the sector.
Producing Provenge involves taking immune cells from a patient, reprogramming them to attack cancer cells and administering them back to the person. While Dendreon managed to find a process that met with FDA approval, it has struggled with the cost of production. The cost of goods sold (COGS) was 77% at one point. And while this has fallen--hitting 53% in the first quarter of 2014--it is still a sizable overhead. In 2012 Dendreon targeted a COGS of 50% by the time quarterly sales topped $125 million, but the company has struggled to achieve either figure.
Dendreon still thinks it can achieve COGS in the mid-30% range, up on the 20% to 30% forecasts it made in 2012 but still a notable fall. But the gains from switching to automated manufacturing processes have been slow to arrive, raising doubts about the viability of the therapeutic vaccine market, FierceVaccines reports. The worries were discussed in research by Decision Resources Group, which quotes experts as having said they were "uncertain about the logistics and processes involved in the manufacture of personalized therapeutic vaccines."
Such uncertainties have dampened enthusiasm for therapeutic cancer vaccines. More than two years after Provenge won approval, questions about the economic viability of producing cancer vaccines at commercial scale remain unanswered.
- read FierceVaccines' article
- here's the DRG release